IRS: Health insurers must take other payment types to protect 'the unbanked'

Change protects uninsured without a bank account

Sep. 2, 2013

Brian Haile

Written by

The Tennessean

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Health insurers must accept money orders and prepaid debit cards from people who get tax subsidies for coverage under the Affordable Care Act, the Internal Revenue Service said last week.

The final ruling from the IRS means “the unbanked” — people without checking accounts — won’t be shut out of expanded coverage opportunities under the federal health law.

Typically, insurers expect payments with personal checks or by automatic withdrawals from checking accounts. The action by the IRS came after Nashville health-care experts pointed out the problem in a report, concluding that as many as 8.5 million uninsured people eligible for tax credits did not have bank accounts.

The report “Uninsured + Unbanked = Uninsured” was written by Brian Haile, senior vice president of health care policy for Jackson Hewitt Tax Service; George Brandes, an associate at Jackson Hewitt; and John Graves, a professor at Vanderbilt University School of Medicine.

Haile remains concerned about what he characterized as “one shortcoming” in the final rule — one that will allow insurers to decide whether to accept automatic deductions from credit or debit cards.

“We were surprised by this policy choice, and we fail to see how limiting consumer options for automated recurring premium payments is consistent with the goal of ensuring continuous enrollment and minimizing attrition in the ACA’s insurance affordability programs,” Haile said.